Twin Cities home-care company to pay $1.6M to settle wage theft case

The parent company of Baywood Home Care in Minneapolis has been ordered to pay $1.6 million in fines and back pay to resolve a labor violation complaint brought by the U.S. Department of Labor.

The federal court order will recover unpaid wages for 136 Minnesota Living Assistance health care workers who were denied overtime pay between 2018 and 2020.

Under the consent order, the company must pay $800,000 in unpaid wages and another $800,000 in damages.

Going forward, Minnesota Living Assistance, operating as Baywood Home Care, also must keep adequate payroll records. The court order puts to bed the lawsuit the federal government first filed in October 2021.

"The resolution of this matter shows that the U.S. Department of Labor will take all necessary actions, including litigation, to hold employers accountable when they fail to respect worker rights and protections," said Seema Nanda, solicitor of labor, in a statement.

According to the initial lawsuit, Baywood Home Care "willfully" and "routinely" subtracted eight hours from each "live-in" worker's 24-hour work shift inside a patient's home, without respect to overtime hours worked. The company also hid from the government that it was paying these workers a flat "day rate" instead of the hourly pay it reported.

The Labor Department's lawsuit noted the "defendants have a history of litigation over their failure to correctly pay overtime that predates the investigation leading to this complaint."

In a statement Thursday, Labor officials said it was important to protect the rights of in-home aid workers as there are about 1.9 million of them in the United States, providing "essential caregiving work and ensuring the dignity of people unable to care for themselves."

On average they earned about $29,430 a year in 2021, the last year for which data is available.

As part of the judgment filed in the U.S. District Court in Minneapolis, Minnesota Living Assistance has agreed to hire an independent party to audit the company's payroll records from Sept. 7, 2022, to Sept. 7, 2023, and to ensure compliance with provisions of the Fair Labor Standards Act.

If the auditor finds problems, Minnesota Living must make restitution within 15 days. The company has also agreed to provide all employees with information about worker rights and protections under federal law.

The lawsuit is the latest wage theft case to come before state and federal officials.

In the last few years Minnesota's attorney general launched wage theft investigations or filed lawsuits against Loving Care Home Services Inc.; the restaurant group Bartmann Companies; Madison Equities and Property Maintenance Construction.